EUR/AUD Awaiting Breakout from Consolidation

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EUR/AUD Awaiting Breakout of the 1.38-1.4070 Range

The 1H EUR/AUD chart shows a market that has been drifting up from 1.3710, which was the low on the year, just below the 2014-low at 1.3788. Let’s examine the technical development since this rebound.

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The 1H chart shows that after drifting higher, the EUR/AUD started to trade sideways around the 1.39-1.3950 area for the most part. However, volatility has been fluxing, and was most wild when it dipped to 1.3803 and then right back up to 1.4070 within a few hours during the 3/18 session. The volatility has died down since.

Now the market is awaiting a breakout from consolidation set by the wild swing. But maybe we can take some clues from the smaller range. A break above 1.40 would likely be enough of an indicator for further bullish outlook in the short-term to 1.4070 and 1.41. A break below 1.3860 however would maintain a bearish trend that has been in force since at least February as we can see in the 4H chart. This would put pressure back on the 2015-low at 1.3710.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.